The state is tightening its monitoring of a Golden Valley estate salesman after dozens of customers from San Francisco to St. Paul said he sold their possessions and pocketed millions in proceeds that belonged to them.
Craig Birkeland was sued by the state in a consumer fraud case that will go to trial in January. In the meantime, he's still doing weekend estate sales, including one in Minnetrista on Saturday, prompting Attorney General Lori Swanson's office to take bigger steps to oversee his company, Conducted Estate Sales, which often does business as Birkeland & Associates.
This month, he agreed to a temporary injunction that allows the state to monitor his accounts, financial paperwork and customer contracts.
"We're trying to do what we can before we get to trial to set up procedural groundwork," said Ben Wogsland, spokesman for Swanson's office, which has received about two dozen complaints on the business.
Birkeland, 49, of St. Louis Park, was represented by an attorney when the Star Tribune first wrote about the case in May. He denied the state's allegations then, but he is no longer a client. Birkeland couldn't be reached for comment.
A rising industry
With the recession and more retirees downsizing, estate sales are becoming increasingly popular. Yet, estate sale companies aren't required to be licensed or have bonds, leaving little consumer protection for clients -- oftentimes families coping with the loss of a loved one or in transition.
In Arizona, retirees Gary and Suzanne Brungardt had Birkeland sell off their Mendota Heights belongings last April before moving, but still haven't gotten $6,000 in proceeds despite Birkeland's promises of a check within four to eight weeks of the sale.
In San Francisco, Bonnie Trach is owed $7,000 for furs, 300 pieces of jewelry and other items Birkeland sold from her parents' St. Louis Park home after they died in 2009.
And in the Twin Cities, Brad Bloedow of Apple Valley is still waiting for $23,000 Birkeland owes him after an estate sale more than a year ago.
Now, the temporary injunction effective Oct. 9 will require Birkeland to give customers written records of sale amounts within five days of a sale and pay them before he gets his share of the proceeds. It also requires that he give the state copies of all customer contracts and financial information from deposit slips to checks. He also has to set up a separate bank account for new sales, recording to the penny the amounts from each customer.
$57K worth of antiques
It comes too late for James Ingemunson. His is one of three new cases filed against Birkeland since May.
Ingemunson, 69, of St. Paul hired Birkeland's company 15 years ago and had a positive experience, so he hired the company again last March. Hoping to use proceeds from the sale to pay down credit card debt, the antique collector filled a moving truck with antique toys such as European wind-up ships and old cars.
Estimated value of all the items: $57,000, he said.
But after Birkeland hauled the antiques to his warehouse to sell, Ingemunson said he never got a receipt showing what was sold. Instead Birkeland told him the sold items equaled about $25,000.
After persistent phone calls, he said he's gotten $5,000 from Birkeland, but hasn't received the rest of the money.
"I can probably kiss that money goodbye, which puts me in a pretty difficult place," Ingemunson said, adding that he's disappointed that Birkeland's company continues to have sales. "Every time I see that I think, 'Oh, there's another poor sucker that's going to get taken.' It's irritating. It's just blatant theft."
A push for new state laws
In the past three years, the local Better Business Bureau has gotten 31 complaints against Birkeland's business.
That's why Linda Pegelow of Bloomington says the state's actions aren't enough; she wants Birkeland shut down and a law to increase consumer protection in the unregulated industry.
Nearly a year after her estate sale, the 62-year-old is still waiting for more than $21,000 that Birkeland owes her and her sister, who handled their cousin's estate after his sudden death.
Despite a judgment issued by a judge who called it "one of the more egregious cases I've seen," Pegelow hasn't seen a cent.
She pushed for a bill last legislative session to require estate sale companies to enter a bond of at least $20,000 with a county before a sale. But, it never got a hearing.
"I'm disappointed the state is allowing them to go on. He still goes out there and has all these sales," she said Friday. "Until I have that money in my pocket ... that's the day I'll be satisfied."
Kelly Smith • 612-673-4141; Twitter: @kellystrib